Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

Macroeconomics

<p>Concerns about deflation - the phenomenon of falling prices&nbsp;of goods and services - in the wake of the financial crisis, have provided the intellectual cornerstone for central banks around the world - led by the Federal Reserve - to embrace unconventional policy measures, notably forward guidance and large scale asset purchases or quantitative easing. A recently published study by the Bank of International Settlements takes aim at deflation aversion and shows that episodes of goods &amp; services deflation over the past 150 years have been associated with surprisingly small output losses, but asset price deflations &ndash; notably declining property prices &ndash; have led to significantly lower GDP growth. I show that a simple demand-supply framework can be used to discriminate between good and bad deflations, and argue that the synchronized policy easings by many of the world&rsquo;s central banks in January and February were designed to address the Great Disinflation associated with a persistent shortfall in aggregate demand globally. Even if the equilibrium global interest rate has declined &ndash; as argued by Ben Bernanke recently - monetary policy still has an important role to play in boosting the psychology of risk taking in the corporate and household sectors.</p>

Concerns about deflation - the phenomenon of falling prices&nbsp;of goods and services - in the wake of the financial crisis, have provided the intellectual cornerstone for central banks around the world - led by the Federal Reserve - to embrace unconventional policy measures, notably forward guidance and large scale asset purchases or quantitative easing. A recently published study by the Bank of International Settlements takes aim at deflation aversion and shows that episodes of goods &amp; services deflation over the past 150 years have been associated with surprisingly small output losses, but asset price deflations &ndash; notably declining property prices &ndash; have led to significantly lower GDP growth. I show that a simple demand-supply framework can be used to discriminate between good and bad deflations, and argue that the synchronized policy easings by many of the world&rsquo;s central banks in January and February were designed to address the Great Disinflation associated with a persistent shortfall in aggregate demand globally. Even if the equilibrium global interest rate has declined &ndash; as argued by Ben Bernanke recently - monetary policy still has an important role to play in boosting the psychology of risk taking in the corporate and household sectors.

Who's Afraid of Deflation?